A linear cost function is C(x) = 7x + 800. (Assume C is measured in dollars.)...

A linear cost function is

C(x) = 7x + 800. (Assume C is measured in dollars.)

(a) What are the slope and the C-intercept?

slope
C-intercept

(b) What is the marginal cost

MC ?

MC =

What does the marginal cost mean?

If production is increased by this many units, the cost decreases by $1.Each additional unit produced reduces the cost by this much (in dollars). If production is increased by this many units, the cost increases by $1.Each additional unit produced costs this much (in dollars).

(c) What are the fixed costs?
$

(d) How are your answers to parts (a), (b), and (c) related?
slope = fixed costs, and C-intercept = marginal cost

C-intercept

slope

= marginal cost

slope

C-intercept

= marginal costslope = marginal cost, and C-intercept = fixed costs
(e) What is the cost of producing one more item if 50 are currently being produced?
$

What is the cost of producing one more item if 100 are currently being produced?

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Expert Solution

milcah answered 1 year ago

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